Hematopoietic progenitor cells require lymphocytes and their soluble products for normal growth in vitro. Patients with aplastic anemia often respond to anti-thymocyte globulin, a potent immunosuppressive agent. These facts suggest a role for immunological mediators in the normal regulation of hematopoiesis and in the bone marrow suppression of aplastic anemia. To investigate specific functions of lymphocytes, we have studied lymphokines, the soluble products of these cells, by measuring their production in patients with aplastic anemia and their role in vitro in supporting or suppressing bone marrow cell colony formation. The role of immunosuppression in ATG's mechanism of action has been studied by determining the specificity of ATG for various human cell types. ATG is not a specific antibody preparation. Patients with aplastic anemia show markedly depressed levels of interleukin 1 production and very high levels of interleukin 2 production in vitro. They have high interferon production and high circulating levels of interferon, predominantly gamma type. Interferon acts as a suppressor of hematopoiesis in vitro. It is possible that ATG functions by providing a source of T cell growth factor, resulting in increases hematopoietin production and bone marrow stimulation by lymphocytes. Interferon may be the natural mediator of suppression in this disease.